Sunday, January 15, 2006

Rent control law now in effect – Recto

Millions of residential tenants are assured of protection against skyrocketing rent nationwide, said Sen. Ralph Recto, major author of the rent control law in the Senate.

“This has been awaited by at least 15 million residential tenants including more than a million students in dormitories in Manila’s university belt. The newly-signed law could greatly help avert disasters awaiting to happen like the recent death of students trapped in a burning dormitory in Sampaloc, Manila.”

“Investors in the housing sector will also find the new law reasonable as the cap on rent increase is still at 10% whereas a lower cap would have favored tenants more. As much as we wanted to give greater relief to tenants, we also did not want to discourage housing builders and lessors who want to improve their properties.”

“The new law covers a higher rent than the previous law that lapsed in December 2004. The higher monthly rent covered by the new law ensures that those covered in the old law would still get coverage even if their rents have increased over time,” said Recto.

The covered monthly rent was increased to R10,000 for urban areas and R5,000 for non-urban areas from R7,000 and R4,000, respectively.

Five million of the beneficiaries are in Manila and 10 million tenants for the rest of the country.

Senator Biazon, chairman of the urban planning, housing and resettlement committee said the new rent control law was harmonized with other laws affecting tenants as well as investors in the housing industry.

Recto said “landlords are advised to collect only two months deposit and one month advance rent. Not one cent more. The current practice is that landlords demand the payment of three-month deposit and two month advance rent on new tenants.”

Recto stressed that the grounds for judicial eviction “are much clearer such as the non-payment of rent for three consecutive months, among others. The old laws generated conflicts as when landlords deceptively evicted tenants saying the units will be used by their family but actually would rent it out to others within the year.”

“The R10,000 monthly rent covered by the new law also is a VAT-exempt transaction, another protection granted to tenants,” Recto added. TEMPO